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Gas is the new petrol - FG to Nigerian car owners, intervention fund, NCDMB, output cut, Petroleum Industry Bill to be passed by mid-2020, says Sylva, FG discovers crude oil in north, says there’s more , OPEC, non-OPEC countries to meet as Saudi, Russia price war affects Nigeria’s budget, FG considers fuel price reduction, OPEC deal: Nigeria to generate additional $2.8 billion revenue as FG reacts

FG considers fuel price reduction

Chike Olisah by Chike Olisah
4 years ago
in Business News, Politics
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The Federal Government has begun consultations with relevant stakeholders on the possible reduction of the pump price of Premium Motor Spirit (PMS), popularly called petrol, as a result of the crash in crude oil prices globally.

This was disclosed by the Minister of State for Petroleum Resources, Mr. Timipre Sylva, on Friday, in Abuja, during his interaction with State House correspondents. The press briefing took place after the committee inaugurated by President Muhammadu Buhari to assess the impact of coronavirus and the crash of crude oil prices globally on the Nigerian economy met with him for further deliberations.

Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

Sylva pointed out to state house correspondents that no definite decision had been taken on the issue of reduction in the pump price of petrol, but admitted that consultations were in progress.

In his statement, he said, “We are still consulting, we are still following it closely. Of course, usually, the product prices follow the crude oil prices but we are still consulting.

“We will get back to you, please, be patient,” he stated.

[READ MORE: Oil price slumps, US extends travel ban to Europe)

The prices of crude oil globally have witnessed sharp fall since the outbreak of the coronavirus disease as Brent Crude sold for $35.44 per barrel and Bonny Light, $33.63 dollars per barrel. This is far below the $57 per barrel benchmark for the 2020 budget.

Due to the crash in crude oil prices, reports have it that the landing cost of imported petrol, which is the only petroleum product that is yet to be deregulated, has dropped as well.

Industry stakeholders have asked the Federal Government to adjust the pricing template for petrol to reflect the reality on ground at the moment due to low oil prices, as Nigerians are paying more for petrol.

Even before the crash in oil prices, the Federal Government had seen that the reduction in its subsidy payment for imported petrol in recent times is necessary.


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Tags: 2020 budgetBrent CrudeCrude oil pricesOn the MoneyPresident Muhammadu BuhariTimipre Sylva
Chike Olisah

Chike Olisah

Chike was a banker with over 11 years experience in retail and commercial banking, risk management, treasury portfolio management and relationship management. He also acquired some experience in financial management and do have some special interest in investment analysis and personal finance. He had stints with financial institutions like the former Intercontinental Bank and Fidelity Bank.

Comments 2

  1. Ade Adebayo says:
    March 14, 2020 at 3:49 pm

    Why not use the surplus to balance the budget rather than reducing the price?

    Reply
  2. 9jaRealist says:
    March 14, 2020 at 5:18 pm

    Dumb move. Instead, use the opportunity to get rid of the subsidy regime and re-rout the resulting extra cash into social investment programs (instead of the current plan to borrow externally to fund these programs). SMH

    Reply

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